Debt Free Pharmacists

[CardinalGirl210]

For the debt free pharmacists out there and any that aspire to be, what do you do with your money? Family trips, cars, investments, etc? How do you personally live your best life financially?

---

Members don't see this ad.

 

[radio frequency]

Max out whatever savings vehicles I can. No debt, anywhere. The problem is that I still find it hard to spend on myself and family. Still driving beater cars and living like I have no money. I keep thinking about upgrading my car or fixing the things I hate about my house like the old gross carpeting, but then I think it would be such a waste of money.

Maybe I need to invest some of that money in counseling because I don't trust this job or this money to not run out and leave us all poor. But at least if I lose my job, my house is paid off!

 

[CardinalGirl210]

Max out whatever savings vehicles I can. No debt, anywhere. The problem is that I still find it hard to spend on myself and family. Still driving beater cars and living like I have no money. I keep thinking about upgrading my car or fixing the things I hate about my house like the old gross carpeting, but then I think it would be such a waste of money.

Maybe I need to invest some of that money in counseling because I don't trust this job or this money to not run out and leave us all poor. But at least if I lose my job, my house is paid off!

So smart! My next goal is to pay my house off just in case! Hopefully in the next 3 years

 

[radio frequency]

So smart! My next goal is to pay my house off just in case! Hopefully in the next 3 years

I don't necessarily think it's smart (in fact it's mathematically a bad deal compared to the low mortgage rates vs average S&P 500 growth rate). I was paranoid and used a windfall to pay it off...but at least it does give you some security in case of hard times. I didn't really know what else to do with the windfall after maxing out all the tax advantaged accounts I had (which is a lot) and purchasing everything I desperately needed to upgrade.

 

[297point1]

The problem is that I still find it hard to spend on myself and family. Still driving beater cars and living like I have no money. I keep thinking about upgrading my car or fixing the things I hate about my house like the old gross carpeting, but then I think it would be such a waste of money.

This is my problem too; I've been 100% debt free for ~5 years now, and I still clip coupons like I have a $2,800 mortgage payment due on the 15th day of every month.

All the extra money goes into retirement, mutual funds, the children's 529 college account, and the eldercare account I've set up for my parents and the in-laws. Auto-deductions means it doesn't even feel like I ever had the money I'm setting aside.

To answer OP's question, vacations >>> material goods. Collect memories, not stuff. The world is opening up again- go and see it! You won't regret it.

 

[radio frequency]

This is my problem too; I've been 100% debt free for ~5 years now, and I still clip coupons like I have a $2,800 mortgage payment due on the 15th day of every month.

All the extra money goes into retirement, mutual funds, the children's 529 college account, and the eldercare account I've set up for my parents and the in-laws. Auto-deductions means it doesn't even feel like I ever had the money I'm setting aside.

To answer OP's question, vacations >>> material goods. Collect memories, not stuff. The world is opening up again- go and see it! You won't regret it.

At least I now spring for a fancy takeout pizza now and then. But up until Covid, I was still shopping Aldi on the regular. Now I'm spoiled with drive up grocery shopping; I can't imagine going back to how it was.

Great idea with the auto deductions. I do the same. It feels like I'm just scraping by every month. But a vacation would be wonderful. Maybe when I hit my next $100k? Honestly, it just always feels like the goalposts are always moving. Try to enjoy it more than I do.

 

[lord999]

Max out whatever savings vehicles I can. No debt, anywhere. The problem is that I still find it hard to spend on myself and family. Still driving beater cars and living like I have no money. I keep thinking about upgrading my car or fixing the things I hate about my house like the old gross carpeting, but then I think it would be such a waste of money.

Maybe I need to invest some of that money in counseling because I don't trust this job or this money to not run out and leave us all poor. But at least if I lose my job, my house is paid off!

I think you should make quality of life improvements as they are usually worth paying for those things you actively dislike. It is not a waste of money for situations that irritate you every day. We can all get a "better" car or house, but there is a difference between serviceable and bad. I paid to tile and wood my floor which makes the interior of our house "ugly" for resale but makes my wife and I very happy as well as the maid that the floor can be made much cleaner.

I don't think you need to pay for counseling on the fear of an unstable job, it is a legitimate one. Rather, consider saving a rainy day fund for if that day comes to buy you time to retrain for something else. Maybe, consider making that investment right now (teaching license is a low hanging fruit but relatively stable if you are debt-free).

If you don't work to work at work more, consider the time that you spend being thrifty to be working at life. Also, if you have children, I firmly believe (as it was done to us) that you should try for a middle-class lifestyle even if you make above middle-class wages. Your children seeing you "struggle" a little like you still have financial aspirations (it's be so nice if we could replace this carpet, so we're going to save some money for this) is an example that serves well. Teaching restraint and patience is reinforced by practicing it yourselves (especially when you actually know you don't have to).

That's what the excess is for me, I don't have to do anything. It's a nice feeling to have.

As for destination vacations, not my cup of tea as I vastly prefer to make my home circumstances even more comfortable (paying household taxes >>>> vacations to me), but you did earn it, you should choose your own preferences.

@radio frequency , what's wrong with Aldi? The German organics line is quite a bit better than some of the crappier offerings at Whole Paycheck. I really wish we had European food standards here for organics.

 

[grizzlesgrizzlies]

For the debt free pharmacists out there and any that aspire to be, what do you do with your money? Family trips, cars, investments, etc? How do you personally live your best life financially?

Invest, invest, invest. Living my best life financially (for me) is not having to rely on the pharmacist paycheck.

 

[grizzlesgrizzlies]

I don't necessarily think it's smart (in fact it's mathematically a bad deal compared to the low mortgage rates vs average S&P 500 growth rate). I was paranoid and used a windfall to pay it off...but at least it does give you some security in case of hard times. I didn't really know what else to do with the windfall after maxing out all the tax advantaged accounts I had (which is a lot) and purchasing everything I desperately needed to upgrade.

Like you, I also paid the mortgage off (while already maxing out tax deferred accounts). I know I could be WAY AHEAD if I had invested more in lieu of paying off the mortgage but zero regrets whatsoever. Even if God forbid the stock market tanks, I'll still have a place to live.

 

[radio frequency]

I think you should make quality of life improvements as they are usually worth paying for those things you actively dislike. It is not a waste of money for situations that irritate you every day. We can all get a "better" car or house, but there is a difference between serviceable and bad. I paid to tile and wood my floor which makes the interior of our house "ugly" for resale but makes my wife and I very happy as well as the maid that the floor can be made much cleaner.

I don't think you need to pay for counseling on the fear of an unstable job, it is a legitimate one. Rather, consider saving a rainy day fund for if that day comes to buy you time to retrain for something else. Maybe, consider making that investment right now (teaching license is a low hanging fruit but relatively stable if you are debt-free).

If you don't work to work at work more, consider the time that you spend being thrifty to be working at life. Also, if you have children, I firmly believe (as it was done to us) that you should try for a middle-class lifestyle even if you make above middle-class wages. Your children seeing you "struggle" a little like you still have financial aspirations (it's be so nice if we could replace this carpet, so we're going to save some money for this) is an example that serves well. Teaching restraint and patience is reinforced by practicing it yourselves (especially when you actually know you don't have to).

That's what the excess is for me, I don't have to do anything. It's a nice feeling to have.

As for destination vacations, not my cup of tea as I vastly prefer to make my home circumstances even more comfortable (paying household taxes >>>> vacations to me), but you did earn it, you should choose your own preferences.

@radio frequency , what's wrong with Aldi? The German organics line is quite a bit better than some of the crappier offerings at Whole Paycheck. I really wish we had European food standards here for organics.

Oh, I very much love Aldi. Great food and great deals. But sometimes I feel like I'm "fake slumming it" when shopping there among the people I really know have no other choice. I haven't been recently because we switched to drive up grocery pickup, but will go back when Covid variants are less of a worry.

We live a very middle class lifestyle in the middle of America, and our children are thriving on it, so we will continue. The only reason to upgrade cars or houses for us at this point is so we can enjoy life more -- my car is nearly two decades old, and so loud I can't hear any music, and it's not safe enough to drive my children in very far. My intent with my first house purchase was to convert my first house into a rental house eventually. I'd like something slightly bigger to fit our family better, with a yard for pets. That may still happen, but housing prices have jumped considerably and I'm not sure I want so much money strictly in housing. For now, this very middle class lifestyle works well for us, so we will keep doing what we normally do!

My job is of course somewhat unstable, but is about as stable as an RPh job can get. I enjoy having options though, and living this way gives us more flexibility to say no to poor work environments in the future. Interesting idea about the teaching certificate. I may look further into that; it could prove useful down the road. Thanks.

 

[lord999]

it's not safe enough to drive my children in very far

Then that's a car worth replacing. You need to worry about micro-optimizations, the spends where they are longer term investments. That's why I like Aldi organics, it's better than some of the bad food sourced from the local grocery, though there is a major reason why MN is the most subscribed co-opt in the country due to the presence of one of the worst chains (Supervalu).

It's not a problem of not spending money, it's about spending money wisely and strategically. Sell the car to someone who is in the former problem, because you have the latter one.

The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.

 

[mentos]

@Momus he has roommates, drives a beater and works for Uber eats.

 

[awval999]

For the debt free pharmacists out there and any that aspire to be, what do you do with your money? Family trips, cars, investments, etc? How do you personally live your best life financially?

Most of the remainder is earmarked preparing for the end of this career and early retirement. So that's additional mortgage prepayment, maxed out retirement and 529 contributions.

Of the remainder, easy, beach vacations with the family (mostly paid with credit card points). A nice bottle of whiskey every now and then.

 

[RxPreceptor]

Well, I'm far from debt free (investing in a home finally), but some words of advice...most of actual spending should just be living expense (groceries, rent, utilities, etc.). Probably best not to go hard core (example: rice and beans diet, ramen noodle diet, etc....there's ways to be frugal and have a healthy, balanced lifestyle). Pay off more principle when possible (student loans, mortgage, etc.)

Like others have mentioned, I drove my hand-me-down auto (fortunate enough to get my hands on) until it regularly failed emissions and become uneconomical to repair/fix up (20 year old car when RIP, saved me sooooo much $$$ over those 6 years). Auto expenses are a HUGE factor to consider for cutting expenses

Really never been into fancy, expensive trips, eating out, or "going out"...camping, budgeted/strategic travel (lodge with a friend/relative) are satisfying enough
*Always pay off credit, expand line of credit (limit) when you can (will help you down the road when making major life purchases)

*Lately delving into employer offered benefits with insurance (might seem like small savings but can add up overtime). Always been a huge fan of eliminating paperwork (automate stuff like student loan payments, direct deposit, utilities payments, etc.) to save yourself some grief from having to waste time doing mundane frequent bill payments (will give you a better forecast for the future once you get all that crap out of the way in determining monthly expenses)

Lately realizing how much I'm not spending by learning/knowing various DIY skills (auto, renovation, hair cutting, cooking, sewing, etc.) thanks to the COVID pandemic (DIY has never been so trendy, cool, and frugal AF)

 

[TranslationalRPh]

Debt free with the exception of one of our duplexes that our tenants pay. We significantly invest in both portfolio and real estate assets, donate sizable sum to ministries, and enjoy ourselves with the rest (vehicles, great vacations, foodie restaurants, events, assistants, nannies, including a night nanny, etc).

 

[Sine Cura]

 

[RxPreceptor]

Then that's a car worth replacing. You need to worry about micro-optimizations, the spends where they are longer term investments. That's why I like Aldi organics, it's better than some of the bad food sourced from the local grocery, though there is a major reason why MN is the most subscribed co-opt in the country due to the presence of one of the worst chains (Supervalu).

It's not a problem of not spending money, it's about spending money wisely and strategically. Sell the car to someone who is in the former problem, because you have the latter one.

The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.

Such truth in this example...some personal examples I've done: buy a cheap bag of microfiber/reusable towels (replace paper towels) and consider object materials/longevity (stainless steel >>> plastic...replacing plastic objects every 5 or so years gets expensive overtime)

 

[RogerWilco]

1) Max out IRA/401k annually (if married then both)
2) Contribute to 529
3) Save for home upgrades wanted but not needed (caveat: mortgage paid off)
4) Regularly read bogleheads.org to learn about saving/investing (free other than time spent)
5) Items such as vacations are saved for annually by deciding amount to be spent and dividing by 12 months; extracting said amount from monthly paychecks (items 1-3 above are completed with funds in excess of monthly re-occurring expenses).

 

[GrandTheftAutumn]

Not quite debt free but my net worth has been positive for a while- the only thing is I don't have any equity in housing.
Still in my 20's so I want to enjoy life for a bit, but haven't found the guts to switch gears yet- always been frugal and rarely ever splurge.
I'll keep on dumping my money into stocks and some portion into savings, while keep making payments to my student loans.
Hoping to do something about the housing situation in the next few years.

 

[disgonbgud]

4 years post-grad, 2 years debt free. My primary goal is to retire early.

Savings rate about 50% of take-home pay mostly in investments (401k, roth IRA, brokerage), which still allows me to buy takeout, eat at nice restaurants, and smaller scale vacations several times a year. Other than trips involving flights and expensive lodging, I honestly don't need to pay close attention to my budget after I built my initial plan; I've set automatic contributions on my 401k and max out my roth at the beginning of the year. I maintain 6 months of expenses in accounts with good liquidity. If you are fiscally responsible, look into maximizing credit card rewards.

I cut my own hair (well), have relatively low rent in a HCOL area, and don't drive.

 

[APN-59 rph]

Not quite debt free but my net worth has been positive for a while- the only thing is I don't have any equity in housing.
Still in my 20's so I want to enjoy life for a bit, but haven't found the guts to switch gears yet- always been frugal and rarely ever splurge.
I'll keep on dumping my money into stocks and some portion into savings, while keep making payments to my student loans.
Hoping to do something about the housing situation in the next few years.

I've been mulling the housing situation for a while (just theoretically....I'm not in either the buy or sell market). Right now the sellers market is hot hot....But (as usual) it seems that the cohort of prospective buyers over the next few years may be shrinking i.e. the population is trending old....soo, are a lot of old timers selling to a smaller number of buyers in the mid range future?

 

[DH1987]

For the debt free pharmacists out there and any that aspire to be, what do you do with your money? Family trips, cars, investments, etc? How do you personally live your best life financially?

Socking it all away and investing it until I can get the f*** out of pharmacy.

As I had hinted to before, I may stop to take a break after I reach around 5 years of living expenses.

 

[GrandTheftAutumn]

I've been mulling the housing situation for a while (just theoretically....I'm not in either the buy or sell market). Right now the sellers market is hot hot....But (as usual) it seems that the cohort of prospective buyers over the next few years may be shrinking i.e. the population is trending old....soo, are a lot of old timers selling to a smaller number of buyers in the mid range future?

I think the real estate prices can only go so much higher from here- there will be a point where the middle class simply can't afford to buy houses (if we're not there already).
Yet the wealth gap gets wider and wider and wider...

 

[WVUPharm2007]

I think the real estate prices can only go so much higher from here- there will be a point where the middle class simply can't afford to buy houses (if we're not there already).
Yet the wealth gap gets wider and wider and wider...

They said that in 2007, too.

Real estate seems unstoppable until it isn't.

 

[pezdispenser]

I invest most of my money. I have access to the mega backdoor Roth with my 401k so I can do $58k total + $6k regular backdoor Roth + $3.6k HSA = $67.6k which is plenty of tax advantaged space. My original goal was to make more from investments than my RPh salary, but it's gotten to the point where things have really snow balled so I've completely blown past that (making >$300k/yr and still snow balling).

As for spending, honestly, after I paid off my mortgage I just felt like I was 'done' and didn't feel the urge to keep chasing new and more expensive things anymore. I already have a nice house on a lake, and my cars are pretty old from 2012 but I keep them in mint condition. When traveling (pre-COVID) I like to be comfortable and carefree so I'll gladly spend more on things like business class on international flights, nice hotels and restaurants, etc.

 

[PharmtoCS]

Would be interesting to see what happens to the economy once the moratoriums on student loan payments, evictions, foreclosures, and the $300 supplement unemployment end by September.

 

[ValeRx]

Would be interesting to see what happens to the economy once the moratoriums on student loan payments, evictions, foreclosures, and the $300 supplement unemployment end by September.

There will be riots.

 

[alpha12]

This is my problem too; I've been 100% debt free for ~5 years now, and I still clip coupons like I have a $2,800 mortgage payment due on the 15th day of every month.

All the extra money goes into retirement, mutual funds, the children's 529 college account, and the eldercare account I've set up for my parents and the in-laws. Auto-deductions means it doesn't even feel like I ever had the money I'm setting aside.

To answer OP's question, vacations >>> material goods. Collect memories, not stuff. The world is opening up again- go and see it! You won't regret it.

2800? is this a 30 year loan?

 

[mentos]

Would be interesting to see what happens to the economy once the moratoriums on student loan payments, evictions, foreclosures, and the $300 supplement unemployment end by September.

I bought SPY puts.

Hopefully the stupid meme stocks like AMC go away and market returns to "normal". Nice and steady returns vs bipolar every other day.

 

[RxPreceptor]

hmmm, I don't know...the early celebration/laxness in public mask mandates & general laziness will likely extend student loans (I'm predicting until end of 2021, possibly end of March 2022). Seems like the perfect **** storm of non differentially diagnosed respiratory infections (combo flu, general cough + cold, CVOID, etc.) all thanks to perfect timing of course and people "celebrating" too hastily (back to school, international travel, and good old fashion people who refuse to get vaccines....thanks unchained...sarcasm)

 

[CORPh81]

hmmm, I don't know...the early celebration/laxness in public mask mandates & general laziness will likely extend student loans (I'm predicting until end of 2021, possibly end of March 2022). Seems like the perfect **** storm of non differentially diagnosed respiratory infections (combo flu, general cough + cold, CVOID, etc.) all thanks to perfect timing of course and people "celebrating" too hastily (back to school, international travel, and good old fashion people who refuse to get vaccines....thanks unchained...sarcasm)

I have heard rumors of an extension until April 2022

 

[297point1]

2800? is this a 30 year loan?

Twenty.

Started at 6.125% interest (ouch...bad timing), refinanced down to a 15 year loan at 4.25% and again to a 10 year loan at 3%. Kept the payments the same the whole time.

 

[PharmtoCS]

IMO, the goalpost shifting and can kicking needs to end.

Most economic restrictions are gone. Businesses have reopened and are having a hard time finding workers. Inflation is rising.

 

[ValeRx]

IMO, the goalpost shifting and can kicking needs to end.

Most economic restrictions are gone. Businesses have reopened and are having a hard time finding workers. Inflation is rising.

There was an actually an article, in the NY Times I believe, that said the silver lining to inflation is that wages are rising... it's like nobody really knows what inflation means.

 

[WVUPharm2007]

1/3 of the increase in inflation is the increase in car values due to semiconductor shortages. Another huge chunk is th natural recovery from the recession last year.

Everything hit at once. It remains to be seen if it is true long term inflation or not. There is still the risk that cutting off the faucet too soon would cause an economic downturn. Once everything gets back up and running, it will be interesting to see what happens.

 

[RxPreceptor]

Yeah, the current money making scheme is rare Earth metal harvesting/mining
@mentos - screw that icecream truck/mobile vaccine-icecream fueled incentive clinic/clandestine money/drug laundering business model

 

[BenJammin]

I think the real estate prices can only go so much higher from here- there will be a point where the middle class simply can't afford to buy houses (if we're not there already).
Yet the wealth gap gets wider and wider and wider...

Home prices are at the lowest today that they'll ever be. If you can't afford today's prices, you'll never afford a house. No one is entitled to a house.

 

[alpha12]

Home prices are at the lowest today that they'll ever be. If you can't afford today's prices, you'll never afford a house. No one is entitled to a house.

I don't understand this comment. Please provide for context for this. The median home price has increased almost every year.

 

[owlegrad]

I don't understand this comment. Please provide for context for this. The median home price has increased almost every year.

Isn’t that the point? If prices “always go up” then they will never be cheaper than they are today (a pretty dubious claim imo but whatever).

 

[BenJammin]

I don't understand this comment. Please provide for context for this. The median home price has increased almost every year.

Your last statement has me wondering what you find confusing. Seems pretty straight forward to me

 

[alpha12]

Isn’t that the point? If prices “always go up” then they will never be cheaper than they are today (a pretty dubious claim imo but whatever).

Point is that there is some sort of bubble going one I am not sure if there is a housing crash coming but this is the worst time to buy a house. There is a supply shortage and sellers call all the shots. Same things with cars.

 

[Sine Cura]

when there's a mass depop event prices will come down

 

[KidPharmD]

Point is that there is some sort of bubble going one I am not sure if there is a housing crash coming but this is the worst time to buy a house. There is a supply shortage and sellers call all the shots. Same things with cars.

Well, that is the question isn't it? Is there a bubble or is this the rising cost of housing in the US? If it is a bubble, is it about to pop or will prices rise another 25% before it does? When it pops, are the prices going to go back to what they were 5 years ago or is it going to be a much smaller decrease than that. People saying that house prices are the lowest now and people who are saying that the housing bubble is about to pop are both guessing.

 

[alpha12]

Well, that is the question isn't it? Is there a bubble or is this the rising cost of housing in the US? If it is a bubble, is it about to pop or will prices rise another 25% before it does? When it pops, are the prices going to go back to what they were 5 years ago or is it going to be a much smaller decrease than that. People saying that house prices are the lowest now and people who are saying that the housing bubble is about to pop are both guessing.

It is hard to tell. To be honest, saying best time and worst time is a fools game. If you need a house now just buy a house and overbid for one. If you need a car now just pay over msrp and get one. Interest rates are low so that is a positive.

 

[Sunshine98*]

I got scholarships (academic and due to being low income) for school. Then my first couple of years out I still lived poor and paid everything off. Since then...MAX it all out: 401k, IRA, HSA, etc. PAY YOURSELF FIRST!!

 

[mentos]

Point is that there is some sort of bubble going one I am not sure if there is a housing crash coming but this is the worst time to buy a house. There is a supply shortage and sellers call all the shots. Same things with cars.

The difference between homes and cars... There is literally no more land to build a home in my area. Plus you need a place to live. Not everyone needs a car or multiple cars per family. During the 2008 housing crash, prices did not fall here. They stayed flat for a couple years, then went up every year after that. Too many high paying jobs in the area and not enough supply.

 

[Rouelle]

I doubt that we’ll see a housing bubble pop and lead to any sort of crisis. Home prices are rising sharply, but will most likely flatten out instead of sharply falling.

Current market trends are based in large part on limited inventory (foreclosure/eviction bans, increased cost of construction materials). This is not like 2008, when the housing crisis was a result of a lending crisis. Now, lending is more regulated and most homeowners actually have some skin in the game. People are much less likely to walk away when they are leaving real equity behind.

 

[mentos]

I doubt that we’ll see a housing bubble pop and lead to any sort of crisis. Home prices are rising sharply, but will most likely flatten out instead of sharply falling.

Current market trends are based in large part on limited inventory (foreclosure/eviction bans, increased cost of construction materials). This is not like 2008, when the housing crisis was a result of a lending crisis. Now, lending is more regulated and most homeowners actually have some skin in the game. People are much less likely to walk away when they are leaving real equity behind.

Yep people actually have money now. 8% of Americans are millionaires, the highest ever. Plus you have banks and foreign businessmen buying up houses as investments. These bidding wars aren't happening if people don't have money. Many buyers are paying 100% cash (no mortgage) too.

 

[mentos]

So all the debt free pharmacists here paid off their mortgage? I keep debating paying it down vs investing.

 

[TranslationalRPh]

So all the debt free pharmacists here paid off their mortgage? I keep debating paying it down vs investing.

I'll make the case for why we paid off our home early.

Don't regret paying off our home. We still invested through it just not as much. With no consumer debt and no mortgage, it's protection against a sometimes fickle job market, unexpected sickness, untimely death, career apathy and/or set backs etc. Your income is typically your most powerful wealth building tool. Income unconstrained by debt permits faster wealth accumulation and downside protection. Since housing is typically your biggest expense, knocking out a mortgage can be transformative. We also live in an aggressive housing market, so we have also gotten some really fast appreciation. We also have a guest house on the grounds that we rent out, so our home is also an investment. For those with the discipline to invest everything into paper or alternative assets instead, I am not saying that doesn't work or isn't reasonable. However, last year when it looks like layoffs were abundant and the stock market temporarily dropped off a cliff, we were so happy that's our fixed expenses were so low. We had financial peace. It was freedom. We did a significant amount of stock investing (for us) during the depressed market last March and April because we had so much downside protection (i.e. reduced fixed expenditure). I am also convinced that when you do a direct comparison of investment returns of asset classes, almost no one includes the risk of keeping a mortgage in their analysis.

Lastly, if you pay off your home and decide you don't like it, you can almost always get another mortgage.